The Caribbean Catastrophe Risk Insurance Facility (CCRIF) is broadening its reach with its first venture into personal insurance products and is supporting trials of a parametric personal weather insurance product designed to pay out to Caribbean residents after a natural disaster strikes.
The CCRIF and its partners have teamed up to support Jamaica International Insurance Company (JIIC) for the trial, which will see the Livelihood Protection Policy (LPP) sold with the guidance of credit unions to trial communities in the region. The product is designed to enable local communities to recover quickly after disaster.

Twelve trial communities have been identified and they will be offered the chance to purchase LPP policies which will protect them against damage caused by severe wind and extreme rainfall events. Property damage is not explicitly covered, rather the policies use a parametric trigger based on actual weather measurements to pay out to policyholders, meaning that they can use payouts to help themselves recover from disasters.

Under the trial the annual premiums for the LPP policies will be about USD$50 (or $5,000 Jamaican dollars) which puts this venture squarely in microinsurance territory.

According to the Jamaica Gleaner it seems that Munich Re is the reinsurance partner for this initiative and the development of the product falls under the Climate Risk Adaptation and Insurance in the Caribbean Project led by the Munich Climate Insurance Initiative (MCII).

JIIC is offering the product in Jamaica, while EC Global is covering Saint Lucia and Trans-Nemwil is the primary insurer in Grenada. The CCRIF provides the wind data which is used to construct the trigger of the parametric index that is used to denote whether an event results in a payout or not. Rainfall data is provided by the DHI (formerly known as the Danish Hydraulic Institute).

This personal policy will be a valuable addition to the Caribbean catastrophe insurance product range.

The CCRIF already offers governments protection against tropical storms, hurricanes and earthquakes, with excess rainfall also available since its recent launch. Those products pay out directly to governments, using parametric triggers, so the availability of insurance products that pay directly to the populace will enable much more rapid disaster recovery and ensure communities are better protected and have cash available after disaster events.